Thursday, June 16, 2011

Does your 99 cent book sell six times as many copies?

I have been playing around with the pricing for Savage Fire, and was convinced to drop the price to 99 cents as a promotion tactic. It hasn't made much difference, as I sold about the same number of copies as I had in the same number of days before that.

But this is where Amazon gets you. Drop the price to 99 cents to compete with all of the other 99 cent books, and your commission drops to 35% instead of 70%. What does that translate to in revenue? Each copy of Savage Fire selling at $2.99 made me a commission of $2.06 on Amazon. Each copy of Savage Fire selling at $0.99 made me a commission of $0.35.

Therefore, six copies sold at $0.99 each would make $2.10, or $0.04 more than one copy at $2.99.

Obviously, there is a value to getting more copies out there, but this is the raw truth behind the differing commissions and the downward price pressure. If more authors would insist on the $2.99 as a floor, that would become more widely accepted by buyers. If everybody races for the bottom price of $0.99, the only one happy is Amazon.

(As an aside, the comparable $0.99 book sold at Smashwords directly brings in $0.56, while the $2.99 book brings in $2.21, so four copies would make more, hardly surprising when the price is three times as much.)

@Medeia - I have no complaints either way, and am certainly glad people are buying (and if the 5-star reviews mean anything, enjoying) my book. Still, I want authors to realize the full impact of the choices they are making.

Incidentally, my price is going back to $2.99 sometime tomorrow evening, so if anybody wants to grab a copy before that, they'd better hurry.

I think that if the standard was 99c, fans could afford to buy more (either more authors, or more from one author) at a time. Many authors tend to think of it as "competing with other 99c books" but I really don't look at it like that. I see it as an opportunity. If I have $3, I can either buy one book (or a third of a book from a big 6 author), or I can buy three if they're 99c.

John Locke has been able to do quite well at 99c and I too haven't done too badly at that price point.

Marketing and engaging with fans is key. It doesn't matter what price point you choose, if you aren't connecting with readers, you aren't going to sell books.

@Phibble - I understand what you mean, and there is some truth to it, but there is another perspective. Your reader has $3 to spend on books, but will $1.05 go to convince three authors to keep writing good books, or will $2.06 go to one author for the same cause? Spread it out too think and a lot of great authors will give up the effort before they have fairly begun.

There are a couple of pieces to the 99 cent puzzle to add. One is that authors who have 3 or more novels out seem to find that lowering one book to 99 cents tends to raise sales of all of them. So even though for a given book, it may not be worth it, it may be a smart move overall. Second, and most importantly, somewhere between 250 and 400 sales per month on Amazon, books tend to gain critical mass to sustain sales without a lot of additional promotion. Not always, but it seems like that's the level where it can happen. If you have a book selling 150 copies a month and lowering it to 99 cents doubles sales after a month, you may find that after 2, 3, 4 months sales have gone up a lot more as it takes advantage of the various Amazon algorithms. You add this to having other books available as well and suddenly it may make more sense.

The fact is that there is no definitive answer on price. The debate has raged and will continue to rage. I shy away from any absolutes on it, as they are the only thing almost guaranteed to be wrong.

@Edward - Very well put. There are no sure answers, and there are many variables that may not be possible to understand. I certainly don't mean to suggest that every author should rush to change their price. Mostly, I wanted to expose the math so that authors knew some of the choices they were making (mostly so I would know what choices I was making).

One the oddest and hardest to predict factors is perceived value. Some people will not buy 99 cent books because they think they must be cheap crap. Others will not buy $4.99 books because they think they are overpriced. My only consolation is that pricing software, art and many others things is just as difficult.

I recently bought a paperback copy of Brent Hartinger's "Geography Club". Then I found out he had two sequels out, which were not available here in Malaysia. When I searched online, I found "The Order of the Poison Oak" at Smashwords, selling at USD6.99, and "Split Screen" at Kobo, selling at USD9.39. Since I loved the first book, I didn't mind buying the other two with a few clicks of the mouse. I didn't have to swipe my credit card, so there.

USD2.99 for a book is more than reasonable. I suggest for you to keep it that way. But for a first book, USD0.99 is also viable, and the subsequent books can be sold at a higher price. If people love your writing, they want more, and price may not be that much a deterring factor. Plus you already have a decent-sized following.

I mean, sure, you want to see the number of sales. The more people read your book, the wider the exposure. But you also have to think about the returns. If you need to sell 4 books at Smashwords (USD0.99) in order to match 1 sale at Kindle (USD2.99), numbers won't reflect much in terms of income.

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